Organisational capacity for responsive regulation

Abstract

In April 1998, the Australian Taxation Office (Tax Office) adopted a policy of responsive
\nregulation of tax compliance by small firms in the building and construction industry.
\nKnown as the Australian Taxation Office Compliance Model (ATO Compliance Model),
\nthe new approach is grounded in past research into regulation of business entities. As
\nseen by its promoters, it promises to improve significantly tax compliance in the cash
\neconomy. Drawing from survey and interview data, we explore the Tax Office’s capacity
\nfor successful implementation of the ATO Compliance Model. Specifically, we examine
\nthe extent to which it had the leadership and staff commitment to implement the policy
\nsuccessfully. We also explore whether or not project field-level staff saw merit in the
\nprogram and eventually came to support it. We conclude by examining whether the
\nowners of small building and construction firms changed their perspectives on the Tax
\nOffice and tax compliance following introduction of the ATO Compliance Model.